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To: John Hunt who wrote (30166)	3/16/1999 5:26:00 PM
From: long-gone	Read Replies (2) \| Respond to of 116756

<<Do you really believe the IMF gold sales will get through a Republican controlled congress? ... To forgive debts of non-voters? ... And a Clinton/Gore idea to boot?>> NO! No way it will pass! A Democratic Senator(Nevada) came out against it. Said these things months ago, but did anyone notice (sniff-sniff)?

To: John Hunt who wrote (30166)	3/17/1999 3:52:00 PM
From: Alex	Respond to of 116756

Buffett lashes out at scandal of US corporate perverts By CHRISTOPHER WEBB Warren Buffett has launched a stinging attack on corporate America's manipulation of earnings figures. The Legend said that when it came to restructuring and merger accounting, many managing directors purposefully worked at manipulating numbers and deceiving investors. ''And as Michael Kinsley has said about Washington: 'The scandal isn't in what's done that's illegal but rather in what's legal,''' Buffett said in Berkshire Hathaway's annual report. ''It was once relatively easy to tell the good guys in accounting from the bad: the late 1960s, for example, brought on an orgy of what one charlatan dubbed 'bold, imaginative accounting' (the practice of which, incidentally made him much loved by Wall Street because he never missed expectations). ''But most investors of that period knew who was playing games... ''In recent years, probity has eroded. ''Many major corporations still play things straight, but a significant and growing number of otherwise high-grade managers - CEOs you would be happy to have as spouses for your children or as trustees for your will - have come to the view that it's OK to manipulate earnings to satisfy what they believe are Wall Street's desires. ''Indeed, many CEOs think this kind of manipulation is not only OK, but actually their duty... ''The distortion du jour is the 'restructuring charge', an accounting entry that can, of course, be legitimate but that too often is a device for manipulating earnings. ''In this bit of legerdemain, a large chunk of costs that should properly be attributed to a number of years is dumped into a single quarter, typically one already fated to disappoint investors. ''In some cases, the purpose of the charge is to clean up earnings misrepresentations of the past, and in others it is to prepare the ground for future misrepresentations. ''In either case, the size and timing of these charges is dictated by the cynical proposition that Wall Street will not mind if earnings fall short by $5 per share in a given quarter, just as long as this deficiency ensures that quarterly earnings in the future will consistently exceed expectations by five cents a share.'' Using an example of a golf cheat, Buffett said that ''unfortunately, CEOs who use variations of these scoring schemes in real life tend to become addicted to the games they're playing - after all, it's easier to fiddle with the scorecard than to spend hours on the practice tee - and never muster the will to give them up. ''Their behavior brings to mind Voltaire's comment on sexual experimentation: 'Once a philosopher, twice a pervert.''' Stockbroking chief questioned in court on Coms21 dealing Peter Gray, principal of the stockbroking concern PG Intercapital, spent most of yesterday being cross-examined about large-scale dealing in Coms21 scrip late last year. With learned friend Richard White repeatedly objecting, Norman O'Bryan for ASIC questioned Gray in the Federal Court about the buying and selling of 4.5million Coms21 shares at 30cents apiece on 23December and the failure of the buyer - a United States outfit known as Terra Industries - to file a substantial shareholder notice. In response to a question from White, Gray told the court he was concerned that Terra had not filed the notice, ''although I'd asked them many times to do so''. O'Bryan asked Gray about his relationship with Frank Favretto, the chairman of Coms21. Asked whether he knew Favretto very well, Gray responded ''yes'' but said he had no relationship with Favretto outside of business. Confirming that PG Intercapital had acted for Coms21 in several capital raisings, Gray said that he spoke to Favretto about four times a week and ''sometimes more often''. O'Bryan put it to Gray that he knew full well that a substantial shareholding notice filed with the stock exchange disguised the true position, to which Gray responded ''no''. Responding to a question from Justice Merkel on the subject of substantial shareholdings, Gray said he mistakenly thought that a relevant interest related to voting control of the shares. The ASIC is seeking various orders from the court, including the vesting of the Coms21 shares held by Gray. ASIC took the action due, it said, to concern that the market in Coms21 shares was uninformed following the failure of various parties to lodge substantial shareholder notices. Gray has filed several substantial notices, including one that stated Terra had an interest in the shares ''subject to its making good its default in paying for the shares and loss to Mr Gray occasioned thereby''. The notice said Terra ''did not put PG Intercapital in funds to complete the purchase'' and a demand for payment was made on 13 January. The hearing continues today. theage.com.au